There are many expenditure options available to farmers who received a tobacco
buyout check. A multinomial probit model is used to analyze how farmer,
business, and household characteristics influence the choice of expenditure
option. Results of the study show that farmers tend to use the tobacco buyout
payments as a special income account which they spend in a focused manner,
and their expenditure choices vary by gender and by age groups. Findings also
reveal that farmers who plan to stay in tobacco production are more likely to
invest in new or existing on-farm activities.